Whether title in immovable property can be transferred on basis of unregistered exchange deed?

 This takes us to the next question as to whether the exchange deed at Exhibit P2 is admissible in evidence or not. The transfer of ownership of their respective properties by Defendant Nos. 1 and 2 was done through Exhibit P2 deed of exchange. It was contended by Defendant No. 1 that the exchange was only of the businesses. However, a careful perusal of Exhibit P2 clearly shows that the RCC building is also a subject matter of the deed of exchange. The value of RCC building exceeds Rs. 100/- which is not in dispute. Section 118 of the TP Act defines 'exchange' as under:

118. "Exchange" defined.-When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an "exchange".

A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale.

18. It is clear from this provision that where either of the properties in exchange are immovable or one of them is immovable and the value of anyone is Rs. 100/- or more, the provision of Section 54 of the TP Act relating to sale of immovable property would apply. The mode of transfer in case of exchange is the same as in the case of sale. It is thus clear that in the case of exchange of property of value of Rs. 100/- and above, it can be made only by a registered instrument. In the instant case, the exchange deed at Exhibit P2 has not been registered.

19. Section 49 of the Registration Act, 1908 provides for the effect of non-registration of the document which is as under:

49. Effect of non-registration of documents required to be registered.-No document required by Section 17 {or by any provision of the Transfer of Property Act, 1882 (4 of 1882)}, to be registered shall-

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(c) Be received as evidence of any transaction affecting such property or conferring such power,

Unless it has been registered:

20. Section 17(i)(b) of the Registration Act mandates that any document which has the effect of creating and taking away the rights in respect of an immovable property must be registered and Section 49 of the Registration Act imposes bar on the admissibility of an unregistered document and deals with the documents that are required to be registered Under Section 17 of the Registration Act. Since, the deed of exchange has the effect of creating and taking away the rights in respect of an immovable property, namely, RCC building, it requires registration Under Section 17. Since the deed of exchange has not been registered, it cannot be taken into account to the extent of the transfer of an immovable property.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5415 of 2011

Decided On: 02.07.2018

Shyam Narayan Prasad Vs. Krishna Prasad and Ors.

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Whether a haben-dum can override S 54 of Transfer of Property Act?

In a gift the donor may impose condition upon the donee or restrict the enjoyment of the property gifted and that condition and limitation must be accepted by donee during the life time of the donee. A limited interest can also be created by a Will; by a deed of partition or by a family settlement. But it is impossible to conceive a deed of Conveyance creating a life estate by the vendor in favour of the vendee. The Conveyance is not required to be accepted by the purchaser as in the case of a gift. There is no evidence that Kalidashi imposed upon her the "self-denying ordinance" or created "an implied trust" by imposing a limitation upon herself. Undoubtedly she was capable and competent to impose upon her restriction on her proprietary rights but she could not by a collateral agreement annex a condition to an absolute grant. The learned Additional District Judge found no word of limitation being there in the premises, but the habendurn, a special provision prevailed over the general provision in the Conveyance. It was not open to Kalidashi to say that she had accepted the Conveyance minus "habendum". According to the learned Judge, Kalidashi created an implied trust by imposing a limitation on herself, it was her creation, a "self-denying ordinance". Vendor divested himself of all he had. His right, title and interest was extinguished. The new right came into being was the right of Kalidashi for her life and after her, of others. Kalidashi could and did limit her own interest.

When a property is transferred absolutely, it must be transferred with all its legal incidents, the vendor is not competent to sever from, the right of property incidents which the law inseparably annexes to it, and thereby to abrogate the law by private arrangement, creating a life estate in favour of the vendee in a deed of Conveyance.

A purchaser cannot limit her own interest in a Conveyance executed by her vendor. She can do so by executing a deed by herself.

So, in my view, a haben-dum cannot override Section 54 of the Transfer of Property Act. A sale is a transfer of ownership of the property. By a transfer, a transferor divested himself of his interest in the property to the transferee. Thereafter he has got no right to create a life estate in favour of a transferee. If any condition or limitation is imposed in the deed of Conveyance that are repugnant to Section 11 of the Transfer of Property Act.

Calcutta High Court

Sm. Manjusha Debi vs Sunil Chandra Mukherjee And Ors. on 21 March, 1972

Equivalent citations: AIR 1972 Cal 310

Bench: A K Mookerji

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